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Public and Private Sector Jobs, Unreported Income and Consumption Gap in India: Evidence from Micro-Data

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Author Info

  • Kar, Saibal

    ()
    (Centre for Studies in Social Sciences, Calcutta)

  • Roy, Poulomi

    ()
    (Jadavpur University)

  • Saha, Sarani

    ()
    (Indian Institute of Technology Kanpur)

Abstract

This paper tries to document the presence of unreported income among public sector employees in India. We investigate empirically the wage gap as well as consumption expenditure parity between public and private sector workers. It tests the hypothesis that despite a lower level of public sector income in some of the quantiles, if the level of durable goods consumption between the private and the public sector employees are similar, then it might be indicative of the presence of unreported income among the public sector workers. The 2004-05 survey of income and consumption by workers in both private and public sectors (NSSO) supports presence of unaccounted for income among public sector employees at the uppermost quantile. The empirical part is followed by a generalized theoretical formulation that comes up with a measure of the equilibrium level of the unreported income earned by the public sector employees.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6404.

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Length: 33 pages
Date of creation: Mar 2012
Date of revision:
Publication status: Forthcoming in: North American Journal of Economics and Finance, 2014
Handle: RePEc:iza:izadps:dp6404

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Keywords: indirect utility; consumption; unreported income; quantile regression; India;

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